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Check in hand, or check clears the bank? When is the Unconditional signed?

Our company (GC) requires that an unconditional lien waiver be signed at the time the check is picked up. However, we have one sub who is refusing to sign the lien waiver until the check clears her account. I tried to explain that's not how it works, and that the signed lien waiver means check is in hand, but we're currently at a standstill. We don't offer Conditional Waivers, and she is refusing to sign at the time of check pick-up, because she is claiming that it is "the law" that the check first clears her account. Any advice?

2 replies

Jun 21, 2019

That's a good question, and timing lien waivers can be a chore. However, an unconditional lien waiver is generally effective upon signing since no rights are reserved within the waiver itself. Meaning if a lien claimant is given a check in exchange for an unconditional lien waiver, but if that check doesn't actually clear, the claimant might be up a creek. Unlike a conditional waiver - unconditional waivers are typically effective immediately upon signature, regardless of whether any payment changes hands - and there are horror stories out there of contractors losing their rights because they thought they'd been paid. Granted, the text of the waiver that's used is important - and if an unconditional waiver states that it's only effective upon the actual receipt of payment, then that waiver may be safe to sign with a check in hand but not in the bank. Then again, that waiver might not be "unconditional" if it has conditions...

For more discussion on Colorado waivers, this is a great resource: Colorado Lien Waivers Overview.

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